Brunei’s Construction Industry: Broken Promises, Crumbling Trust – A Follow-Up

Brunei’s Construction Industry: Challenges and Accountability Under Scrutiny"

 

Delayed payments, regulatory hurdles, material shortages, and the use of immunity clauses are straining Brunei’s construction sector. In this follow-up report, we explore the systemic issues undermining progress and the growing calls for accountability and reform. Can the sector recover in time to support Brunei’s Wawasan 2035 goals? Read on to learn more.

By Malai Hassan Othman

 

BANDAR SERI BEGAWAN, DECEMBER 2024 – In our previous report, we revealed the underlying issues plaguing Brunei's construction industry—delayed payments, regulatory bottlenecks, legal complications, and material shortages.

 

As stakeholders continue to navigate these systemic challenges, this follow-up offers an in-depth examination of the critical issues that hinder progress and erode public trust. 

 

Through new insights and verified examples, we illuminate the sector's struggles and amplify the call for urgent reform. 

 

Once envisioned as a catalyst for national development, Brunei’s construction sector now faces a pivotal test of resilience. 

 

Can it overcome bureaucracy, inefficiency, and governance gaps to fulfil the aspirations of Wawasan 2035?

 

The Foundations of Dysfunction: A Legal Case  Study

 

A recent court case has highlighted the significant challenges contractors and suppliers encounter when dealing with government agencies. 

 

The claimant alleged that a government-linked agency exceeded its authority in a dispute over procurement contracts. 

 

Despite presenting certified documentation indicating that the agency’s directors acted ultra vires (beyond their legal authority), the agency used constitutional immunity to evade accountability. 

 

The claimant stated: “They delayed proceedings, increased litigation costs, and used immunity to escape responsibility. This isn’t just about one case—it’s about a system that allows institutions to avoid  accountability.”

 

This case also exposes troubling practices within Brunei's legal system. 

The claimant’s former lawyer withdrew representation at a crucial moment, leaving them without legal support during pivotal stages of the process. 

 

Allegations of collusion between legal professionals and powerful entities have further undermined public confidence in the justice system.

 

Immunity Clauses: A Double-Edged  Sword

 

At the core of many grievances is Article 84B of Brunei’s Constitution, which grants absolute immunity to the Sultan and extends to officials acting on his behalf. 

 

While this clause was meant to safeguard governance, critics argue it is often misapplied by government agencies to shield themselves from claims of negligence or bad faith. 

 

A supplier recounted: “We delivered materials for a project, only to be told later that the agency didn’t authorise the purchase. When we pursued legal action, immunity was invoked. How is this  fair?”

 

Such cases highlight the power imbalance created by immunity clauses, which stakeholders argue have fostered a culture of impunity within public institutions.

 

Delayed Payments: Financial Strain on  Contractors

 

For years, contractors and suppliers in Brunei have faced prolonged payment delays from government agencies. 

 

The introduction of TAFIS 2.0 in 2024 was intended to streamline financial processes and ensure prompt payments, but stakeholders report that the system has only worsened delays. 

 

Contractors have shared experiences of waiting months—or even years—for payments to be processed. One contractor stated: “We fulfilled our end of the contract, but payments are still pending. This isn’t just about our business—it’s about paying our workers and sustaining  livelihoods.”

 

Efforts by the Ministry of Finance and Economy (MOFE), such as User Clinics and training programs, have yet to address the root causes of the delays, leaving many contractors in financial limbo.

 

Material Shortages and Delays: A Critical  Bottleneck

 

Another major challenge is the approval process for construction materials, which contractors argue has become a significant bottleneck. 

 

Suppliers encounter long delays in obtaining permits to import or distribute materials, with shipments often stranded at ports for months. 

These delays ripple through the industry, causing project timelines to slip and expenses to rise for all stakeholders. 

 

A supplier explained: “We’ve had materials sitting idle because permits haven’t been processed. These delays increase costs, stall projects, and harm everyone involved.”

 

Additionally, stringent requirements for certified materials and unresolved industrial land lease applications exacerbate the issue. 

 

Contractors have expressed frustration, pointing out that these bureaucratic hurdles obstruct their ability to meet deadlines. 

 

One contractor lamented: “How can we build when the materials we need are delayed for months? These bottlenecks are destroying the industry.”

 

ABCi: Regulatory Bottlenecks and Local Talent  Sidelined

 

The Authority for Building Control and Construction Industry (ABCi) has faced criticism for its protracted approval processes and inconsistent enforcement. 

 

Developers report that obtaining building permits can take months, leading to delays that substantially inflate project costs. 

 

One developer described their predicament: “By the time approvals come through, costs have doubled, and timelines are no longer realistic. It feels like the system is designed to slow us down, not assist us.”

 

Furthermore, ABCi has been scrutinised for not prioritising local talent. 

 

Despite Brunei's pool of skilled professionals, expatriates continue to dominate the sector, sidelining locals and raising concerns about the agency's commitment to fostering self-reliance.

 

Banking Challenges: Reluctance to Invest in  Construction

 

Financial institutions, vital for the health of the construction ecosystem, are becoming increasingly hesitant to lend to contractors due to the high risks associated with delayed payments and systemic inefficiencies. 

 

One senior banker observed: “Credit is the greatest equaliser in any capitalistic system, allowing those with good ideas but little capital to realise their potential. 

 

However, in Brunei, we’ve grown much more risk-averse following the 2013-15 oil bust. 

 

Even the biggest players in construction felt the strain, and now banks are only lending to the most secure credits. 

 

This prevents smaller firms from rising to challenge the status  quo.”

 

The banker added: “While the government has initiated programs like DARe, BEDB, and Bank Usahawan to support businesses, their impact has been limited. 

 

DARe focuses on FDI but struggles with implementation, while Bank Usahawan has been overly cautious, lending very little and boasting about low losses instead of fostering meaningful  innovation.”

 

This hesitance has left smaller firms struggling to secure the credit necessary to remain viable, exacerbating delays and financial instability across the industry. 

 

Without meaningful risk-sharing mechanisms or government guarantees, financial institutions remain reluctant to support the sector.

 

Public Outcry: A Call for  Reform

 

Public frustration with Brunei’s construction industry is mounting. 

 

Letters to the editor in publications like the Borneo Bulletin frequently express grievances concerning delayed payments, material shortages, and regulatory inefficiencies. 

 

One letter criticised the lack of accountability: “Contractors, suppliers, and homebuyers are suffering because of a broken system. 

 

How can we move forward when delays and excuses are the norm?” 

 

Another letter questioned the sidelining of local professionals: “Bruneians are more than capable, yet they’re being ignored in favour of foreign workers. Isn’t it time we prioritise our people?”

 

A Roadmap for  Reform

 

To address these systemic challenges, Brunei must implement comprehensive reforms aimed at restoring trust, accountability, and efficiency in the construction sector. Key recommendations include:

 

Resolve Payment  - Delays:

 

Expedite payments through TAFIS 2.0 by addressing technical glitches and simplifying processes.

 

Streamline Material  - Approvals:

 

Establish a fast-track process for permit applications to prevent supply chain disruptions.

 

Enhance ABCi  - Efficiency:

 

Simplify regulatory processes and standardise enforcement to eliminate delays and perceptions of favouritism.

 

Refine Immunity  - Clauses:

 

Limit the scope of immunity to prevent misuse and ensure accountability for actions beyond authority or with ill intent.

 

Support Financial  - Viability:

 

Collaborate with banks to provide risk-sharing mechanisms and government-backed guarantees for contractors.

 

Strengthen Legal  - Advocacy:

 

Encourage robust representation for claimants and enforce ethical standards to prevent legal collusion.

 

Promote Local  - Talent:

 

Introduce policies that empower Bruneian professionals and reduce reliance on expatriates.

 

Conclusion: Building Trust Alongside  Infrastructure

 

Brunei’s construction industry is at a critical crossroads. 

 

Delays in payments, material bottlenecks, regulatory inefficiencies, and governance gaps threaten not only the sector but also the nation’s broader ambitions for Wawasan 2035. 

 

Yet, the opportunity for reform remains. As one contractor articulated: “We need a system that works for everyone, not just those in power. Accountability and efficiency must be the foundation of our  future.”

 

Brunei must act now to restore trust, streamline processes, and ensure its construction industry becomes a pillar of progress rather than a symbol of dysfunction. (MHO/12/2024)

Brunei’s Construction Industry: Betrayed by Bureaucracy, Dismantled by Neglect

"What happens when a nation’s dreams are built on broken foundations? Brunei’s construction industry, once a proud symbol of progress, now stands in ruins—abandoned projects, sidelined local talent, and rogue developers wreaking havoc on homebuyers. Behind every cracked facade lies a deeper story of neglect, exploitation, and lost identity. Are we witnessing the slow collapse of a nation’s vision?"

 

By DMAO and Malai Hassan Othman

 

BANDAR SERI BEGAWAN, DECEMBER 2024: Brunei’s construction industry, once a proud beacon of national identity and progress, is now a shameful reflection of systemic neglect and bureaucratic dysfunction.  

 

Forty years after independence, the sector that should have been dominated by local talent and rooted in cultural pride is instead a breeding ground for unqualified expatriates, botched projects, and abandoned dreams.  

 

The revelations from a recent closed-door meeting between Legislative Council members (MMN) and the Institution of Surveyors, Engineers, and Architects (PUJA) expose a crisis that cuts to the heart of Brunei’s aspirations. 

 

It’s a damning indictment of a system that has failed its people, prioritising cost-cutting and convenience over quality, safety, and national pride.  

 

Local Talent Abandoned, Foreign Workers Overrun the Industry

Where are Brunei’s homegrown architects, engineers, and planners? 

 

Driven out by limited opportunities and stalled projects, local professionals—many of them graduates from Universiti Teknologi Brunei (UTB)—are sidelined while expatriates, some barely qualified, dominate the industry.  

 

UTB graduates, lacking international accreditation, are forced to compete on an uneven playing field. 

 

Unlike their peers in Malaysia and Singapore, who achieve Chartered status with ease, Bruneians face closed doors at home and abroad. 

 

Many have no choice but to abandon their dreams or leave the country.  

 

Meanwhile, unregulated expatriates have stepped in, claiming the lion’s share of opportunities. 

 

“We’re losing our nation’s identity to foreign hands,” one disillusioned professional said.

 

“This isn’t just an oversight—it’s a betrayal.”  

 
Design & Build: Cutting Corners, Killing Quality   

The Design and Build (D&B) approach has become the industry’s default method, but instead of fostering innovation, it’s a disaster. 

Contractors, given unchecked control, prioritise cost-cutting over quality, sidelining consultants who are supposed to ensure safety and integrity.  

 

The results are everywhere: housing projects left to rot, public buildings devoid of cultural relevance, and a skyline that no longer tells Brunei’s story. 

 

Buildings that once reflected Melayu Islam Beraja (MIB) values now resemble a “rojak” —a tasteless mix of architectural styles with no coherence.  

 

Neighbouring countries, such as Malaysia, have shown how culturally inspired architecture can coexist with modernity. 

 

Malaysia’s Putrajaya stands as a benchmark Brunei should aim to meet or exceed.  

 

Systemic Inefficiencies and Vendor Bullying  

Brunei’s tendering system compounds these issues by rewarding the lowest bid rather than quality. 

 

Contractors cut corners, using substandard materials and unqualified labour to meet tight budgets. 

 

Adding insult to injury, government project managers and executives have been accused of pressuring contractors and consultants into giving additional discounts under the guise of budget-saving exercises. 

 

Affected vendors report withheld payments and forced terms that deviate from original agreements.  

 

One consultant shared, “We completed our work on time and within specifications, yet they demanded discounts that weren’t part of the deal. It’s bullying, plain and simple.”

 

These coercive practices, combined with delays in project approvals that stretch into months or years, have deterred foreign investors and stifled local development. 

 

Global investors accustomed to streamlined processes are bypassing Brunei for more predictable markets, further widening the gap between aspiration and reality.  

 

Unregulated Developers: A Nightmare for Homebuyers

The housing sector has become a minefield for buyers. Rogue developers, operating with impunity, abandon projects, leaving families to shoulder loans for homes they’ll never live in. 

 

Adding insult to injury, Qualified Persons (QPs) tasked with ensuring compliance are often scapegoated for developer failures. 

 

This lack of accountability is a slap in the face to every Bruneian citizen.  

 

A System in Freefall: What’s at Stake? 

Brunei’s construction industry is not just in trouble—it’s in freefall. 

 

Its inefficiencies, lack of oversight, and misplaced priorities betray the principles of self-reliance and cultural pride that underpin Wawasan 2035.  

 

For Brunei to regain its competitive edge, it must emulate nations like Singapore, where streamlined processes and transparent systems attract global investors. 

 

Singapore’s Building and Construction Authority (BCA) serves as a model, proving that efficiency and accountability can coexist in governance.  

 

Reforms Needed Now 

To salvage what’s left, Brunei must act immediately. The following reforms are non-negotiable:  

 

1.     Revise D&B Practices: Restrict this method to specialised projects and restore consultants’ authority over quality and cultural integrity.

 

2.     Accredit UTB Programs: Achieve international recognition to empower Brunei’s graduates to compete globally and take leadership roles locally.

 

3.     Streamline Bureaucracy: Implement technology to expedite approvals and rebuild investor confidence.

 

4.     Regulate Developers: Enforce strict registration, financial checks, and penalties to protect homebuyers and ensure accountability.

 

5.     Fix the Tendering System: Prioritize quality and sustainability over cost to safeguard public trust.  

 

The Cost of Complacency  

Brunei’s construction industry once stood as a proud testament to the nation’s values and aspirations. Today, it’s a cautionary tale of neglect, inefficiency, and misplaced priorities.  

 

If these issues are not addressed, the consequences will be catastrophic—not just for the industry but for the very fabric of Brunei’s identity. 

 

“We’re not just losing buildings—we’re losing who we are.” 

 

The time for complacency is over. The time for action is now.  

 

Disclaimer: This article is based on documents shared anonymously and aims to shed light on systemic issues without implicating specific organisations or individuals.

 

 

2024 in Review: Brunei's Recovery and the Countdown to Wawasan 2035

As Brunei wraps up 2024, the nation finds itself at a crossroads - celebrating impressive economic growth yet grappling with deep-seated challenges. With just a decade left to achieve the ambitious Wawasan 2035, can Brunei turn its vision into reality? From hybrid rice harvests to fiscal deficits, underemployment, and missed opportunities, this is the story of a nation racing against time to secure a sustainable and prosperous future. The question is: Will it succeed?

 

By Malai Hassan Othman

 

BANDAR SERI BEGAWAN, DECEMBER 2024: As 2024 draws to a close, Brunei stands at a defining moment.

 

Official numbers highlight encouraging signs of economic recovery, yet behind the figures lies a deeper reality - one of progress tempered by persistent challenges and missed opportunities.

 

For many Bruneians, Wawasan 2035—the nation’s ambitious vision of a diversified, sustainable, and inclusive economy—feels both hopeful and distant. 

 

The year reflects small but important strides in agriculture, manufacturing, and aquaculture alongside ongoing struggles with fiscal resilience, underemployment, and overreliance on oil.

 

With just a decade left to deliver on its promises, the question remains: Is Brunei moving fast enough to secure its future?

 

Brunei’s economy expanded by 6.8% in the first quarter of 2024, a rebound driven by 8.9% growth in oil and gas, with crude production reaching 102,000 barrels per day. 

 

Hydrocarbons continue to dominate government revenues, but progress outside the oil sector is beginning to take shape, signalling early steps toward diversification. 

 

The agriculture sector, long overshadowed, is showing encouraging signs of revival. 

 

In March 2024, the first successful harvest of high-yield hybrid rice at the Lekiun Agricultural Development Area marked an important step toward addressing food security. 

 

Farmers trained in modern rice management techniques have reported higher yields, reflecting the potential of partnerships and innovation in the sector.

 

Yet, challenges remain. Agriculture currently contributes only 0.49% to GDP, and the sector continues to rely heavily on an ageing workforce, with the average age of farmers hovering around 55 years old. 

 

Younger generations, while recognising the potential in agriculture, remain hesitant to engage due to financial risks, limited access to affordable credit, and outdated perceptions of farming as an unprofitable endeavour.

 

This financial gap is where the proposal for a Bank Pertanian, or Agricultural Development Bank, could play a transformative role. 

 

Such a bank would focus on providing low-interest loans, grants, and financial products tailored to the needs of farmers, agripreneurs, and agro-industrial businesses. 

 

It could also support financing for modern tools, machinery, and irrigation systems critical to increasing productivity and reducing operational risks.

 

Agripreneur Dayang Rosenta, who has been part of the hybrid rice project, reflects on this need: 

 

“We need more accessible and affordable financing. Many of us can’t afford new equipment or expand our farms without support. A dedicated agricultural bank could give us the boost we need to make agriculture viable.” 

 

In addition to traditional loans, Bank Pertanian could integrate innovative financial models, such as the muzara’ah profit-sharing scheme, to attract younger farmers into the sector. 

 

By partnering with landowners and sharing farming risks, these models lower the entry barriers for aspiring agripreneurs, ensuring long-term sustainability for Brunei’s agricultural ecosystem. 

 

The establishment of such a bank would align with Brunei’s broader goals of reducing import dependency, improving food security, and creating a productive and sustainable agricultural economy. 

 

It would not only address financial challenges but also reframe agriculture as a viable and respected career for the next generation.

 

Progress is also emerging in manufacturing, particularly in small-scale industries.

 

The clothing sector grew by 24.8%, and local food production businesses have begun exporting poultry and processed goods to regional markets. 

 

However, entrepreneurs continue to face significant hurdles. Haji Rosli, a café owner who expanded into food production, highlights the challenges: 

 

“We have good products, but access to better packaging and bigger markets is tough. If we want to compete outside Brunei, we need support to improve quality and visibility.” 

 

While industrial parks such as Sungai Liang offer opportunities, bureaucratic processes, limited infrastructure, and market access remain barriers for small businesses. 

 

The aquaculture industry also shows promise as Brunei explores its blue economy potential. 

 

Sustainable fish farming initiatives at Sungai Liang Industrial Park have increased local production of sea bass, tilapia, and shrimp, contributing to food security and reducing imports. 

 

Still, small-scale operators face challenges with outdated tools, inconsistent technical support, and limited access to financing.

Progress in Downstream Industries

Brunei’s downstream industries continue to be pillars of the non-oil economy, showing strong growth and export potential in 2024. 

Brunei Methanol Company (BMC) and Brunei Fertilizer Industries (BFI) exemplify this progress, with significant contributions to industrial output and exports.

BFI, operational since 2021, has expanded its production capacity, exporting $356 million worth of urea in 2024, further solidifying Brunei’s position in the global fertiliser market​. 

The facility not only creates jobs but also drives economic activity in supporting sectors like logistics and supply chain management.

Similarly, BMC, a major player in the methanol sector, has strengthened its output to cater to growing regional demand. 

Methanol, a key feedstock in various industries, has bolstered Brunei’s export profile while positioning the country as a reliable supplier in Asia.

These downstream ventures are not only adding value to Brunei’s hydrocarbon resources but also laying the groundwork for broader industrial diversification.

Together, they demonstrate the potential of leveraging Brunei’s natural assets to create sustainable economic opportunities beyond crude oil and LNG exports.  

While these gains provide cautious hope, Brunei continues to face deep-rooted structural challenges. 

 

The fiscal deficit, projected to reach $2.99 billion for FY 2024/25, underscores the economy’s heavy dependence on hydrocarbons as its primary revenue stream. 

 

Despite diversification efforts, oil and gas remain Brunei’s economic backbone, leaving it vulnerable to price fluctuations and global market uncertainties. 

 

Traditionally, navigating such deficits has involved calls for prudent spending and cost-cutting. 

 

However, observers argue that Brunei must adopt a smart investment mindset - one that prioritises strategic spending in growth sectors such as agriculture, manufacturing, and ICT. 

 

These investments could unlock long-term revenue streams and reduce dependency on oil and gas. 

 

Brunei’s $70 billion reserve, a testament to decades of resource wealth, offers a unique opportunity to accelerate this transformation.

 

Strategic use of these funds - focused on building infrastructure, supporting emerging industries, and fostering innovation - could serve as a catalyst for sustainable economic growth. 

 

However, analysts caution that the reserve, while substantial, must be leveraged wisely. 

 

Overreliance could risk depleting the nation’s financial buffer, but targeted investments in future-ready industries could secure Brunei’s fiscal resilience for generations to come. 

 

A smart investment approach would mean directing resources toward sectors that create jobs, foster innovation, and position Brunei as a competitive player in regional and global markets. 

 

While fiscal prudence remains essential, growth-oriented spending is key to breaking the cycle of deficit reliance and ensuring the economy thrives beyond hydrocarbons. 

 

At the same time, Brunei’s employment landscape reflects another pressing challenge: underemployment and job mismatch. 

 

Many graduates are forced to settle for roles that do not match their qualifications, leading to frustration and a sense of wasted potential. 

 

Yasin, an engineering graduate working part-time in retail, sums up the reality: 

 

“I studied engineering, but I’ve been working part-time in retail. There just aren’t enough quality jobs that fit what we’ve trained for.”

 

For years, efforts to address unemployment have focused on balancing supply and demand, often by pushing job seekers into available vacancies. 

 

However, this approach inadvertently contributes to underemployment - where individuals are underutilised in roles far below their capabilities. 

 

A mindset shift is needed: from simply reducing unemployment numbers to creating meaningful, quality job opportunities. 

 

This means investing in future-ready industries, such as renewable energy, ICT, and the creative economy, and fostering entrepreneurship to empower Brunei’s youth to build their own opportunities. 

 

Such a focus would not only address job mismatch but also align employment strategies with Brunei’s economic aspirations under Wawasan 2035. 

 

With 2025 approaching, Brunei is now just a decade away from its Wawasan 2035 target. 

 

The seeds of progress - seen in hybrid rice cultivation, sustainable aquaculture, and small business ventures—are beginning to sprout. 

 

However, without bold, sustained action, these opportunities risk being lost. 

 

Observers argue that Brunei must act urgently to address these challenges by: 

 

• Expanding investment in non-oil sectors like agriculture, aquaculture, and manufacturing.

• Supporting farmers and young entrepreneurs with innovative financing models such as the muzara’ah profit-sharing scheme and establishing a dedicated Bank Pertanian

• Leveraging its $70 billion reserve for smart, growth-oriented investments that create resilience beyond hydrocarbons. 

Brunei’s economy has shown its resilience in 2024, but growth alone is not enough. 

 

The time for bold execution is now - because a vision without action is just a dream. 

 

The next ten years are Brunei’s opportunity to build a future that its people can see, feel, and believe in. 

 

As we close the chapter on 2024, let us look forward to 2025 with renewed hope and determination. 

 

May the new year bring prosperity, progress, and the realisation of a brighter future for all Bruneians. (MHO/12?2024)